IDEAS home Printed from https://ideas.repec.org/a/col/000107/008319.html
   My bibliography  Save this article

The Macroeconomics of Remittances in The Philippines

Author

Listed:
  • Veronica Bayangos
  • Karel Jansen

Abstract

This article first explores the cyclical dynamics ofremittances, and then, analyzes the macroeconomicimpact of remittances and the monetary policy implications.In this endeavor, we use the case of thePhilippines, one of the countries where remittancesare substantial. A dynamic structural quarterlymacroeconometric model of the Philippines is usedto trace the various channels through which remittancesaffect the main macroeconomic variables.In the assessment of the impact of the 2008 globalfinancial crisis, we should also consider the remittancesas a transmission channel. We haveestablished that remittances are driven by the economiccycle of the main host countries and thatthe ongoing recession will thus lead to a decline intransfers. Through our model, we have been ableto trace the impact of changes in remittances onimportant economic variables such as aggregatedemand, money supply and interest rates, the exchangerate, and labor supply and wages.

Suggested Citation

  • Veronica Bayangos & Karel Jansen, 2010. "The Macroeconomics of Remittances in The Philippines," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 28(61), pages 18-58, August.
    • Handle: RePEc:col:000107:008319
    DOI: 10.32468/Espe.6101
    as

    Download full text from publisher

    File URL: https://doi.org/10.32468/Espe.6101
    Download Restriction: no
    File URL: https://libkey.io/10.32468/Espe.6101?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Taylor, Mark P & Sarno, Lucio, 1997. "Capital Flows to Developing Countries: Long- and Short-Term Determinants," The World Bank Economic Review, World Bank, vol. 11(3), pages 451-470, September.
    2. Graciela L. Kaminsky & Carmen M. Reinhart & Carlos A. Végh, 2005. "When It Rains, It Pours: Procyclical Capital Flows and Macroeconomic Policies," NBER Chapters, in: NBER Macroeconomics Annual 2004, Volume 19, pages 11-82, National Bureau of Economic Research, Inc.
    3. Laurence M. Ball, 1999. "Policy Rules for Open Economies," NBER Chapters, in: Monetary Policy Rules, pages 127-156, National Bureau of Economic Research, Inc.
    4. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, vol. 90(1), pages 144-152, September.
    5. Balisacan, Arsenio M. & Hill, Hal (ed.), 2003. "The Philippine Economy: Development, Policies, and Challenges," OUP Catalogue, Oxford University Press, number 9780195158984.
    6. Veronica Bayangos & Karel Jansen, 2010. "The Macroeconomics of Remittances in The Philippines," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 28(61), pages 18-58, August.
    7. Dean Yang, 2008. "International Migration, Remittances and Household Investment: Evidence from Philippine Migrants’ Exchange Rate Shocks," Economic Journal, Royal Economic Society, vol. 118(528), pages 591-630, April.
    8. Sandra M. Leitner, 2005. "The Business Cycle in the Philippines," Macroeconomics Working Papers 22644, East Asian Bureau of Economic Research.
    9. Mr. Jacques Bouhga-Hagbe, 2004. "A Theory of Workers' Remittances with An Application to Morocco," IMF Working Papers 2004/194, International Monetary Fund.
    10. Jean Imbs, 2004. "Trade, Finance, Specialization, and Synchronization," The Review of Economics and Statistics, MIT Press, vol. 86(3), pages 723-734, August.
    11. Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
    12. Dillon Alleyne * & Claremont D. Kirton & Mark Figueroa, 2008. "Macroeconomic determinants of migrant remittances to Caribbean countries: panel unit roots and cointegration," Journal of Developing Areas, Tennessee State University, College of Business, vol. 41(2), pages 137-153, January-M.
    13. John B. Taylor, 1999. "Monetary Policy Rules," NBER Books, National Bureau of Economic Research, Inc, number tayl99-1.
    14. Mr. Serdar Sayan, 2006. "Business Cycles and Workers' Remittances: How Do Migrant Workers Respond to Cyclical Movements of GDP At Home?," IMF Working Papers 2006/052, International Monetary Fund.
    15. Rand, John & Tarp, Finn, 2002. "Business Cycles in Developing Countries: Are They Different?," World Development, Elsevier, vol. 30(12), pages 2071-2088, December.
    16. Blanchard, Olivier Jean & Kiyotaki, Nobuhiro, 1987. "Monopolistic Competition and the Effects of Aggregate Demand," American Economic Review, American Economic Association, vol. 77(4), pages 647-666, September.
    17. Vargas-Silva, Carlos, 2008. "Are remittances manna from heaven? A look at the business cycle properties of remittances," The North American Journal of Economics and Finance, Elsevier, vol. 19(3), pages 290-303, December.
    18. Imbs, Jean, 2006. "The real effects of financial integration," Journal of International Economics, Elsevier, vol. 68(2), pages 296-324, March.
    19. Amuedo-Dorantes, Catalina & Pozo, Susan, 2004. "Workers' Remittances and the Real Exchange Rate: A Paradox of Gifts," World Development, Elsevier, vol. 32(8), pages 1407-1417, August.
    20. Socorro Gochoco-Bautista, Maria, 2000. "Periods of Currency Pressure: Stylized Facts and Leading Indicators," Journal of Macroeconomics, Elsevier, vol. 22(1), pages 125-158, January.
    21. HwaJung Choi, 2007. "Are Remittances Insurance? Evidence from Rainfall Shocks in the Philippines," The World Bank Economic Review, World Bank, vol. 21(2), pages 219-248, May.
    22. Yap, Josef T., 1996. "Inflation and Economic Growth in the Philippines," Discussion Papers DP 1996-11, Philippine Institute for Development Studies.
    23. El-Sakka, M. I. T. & McNabb, Robert, 1999. "The Macroeconomic Determinants of Emigrant Remittances," World Development, Elsevier, vol. 27(8), pages 1493-1502, August.
    24. Buch, Claudia M. & Kuckulenz, Anja & Le Manchec, Marie-Helene, 2002. "Worker Remittances and Capital Flows," Kiel Working Papers 1130, Kiel Institute for the World Economy (IfW Kiel).
    25. Mr. Robert M Burgess & Mr. V. Haksar, 2005. "Migration and Foreign Remittances in the Philippines," IMF Working Papers 2005/111, International Monetary Fund.
    26. Mr. Ayhan Kose & Mr. Kenneth Rogoff & Mr. Eswar S Prasad & Shang-Jin Wei, 2003. "Effects of Financial Globalization on Developing Countries: Some Empirical Evidence," IMF Occasional Papers 2003/007, International Monetary Fund.
    27. Carlos C. Bautista & Roberto S. Mariano & Bayani Victor Bawagan, 2009. "The NEDA quarterly macroeconomic model: theoretical structure and some empirical results," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 46(2), pages 240-260, December.
    28. Calvo, Guillermo A., 1983. "Staggered prices in a utility-maximizing framework," Journal of Monetary Economics, Elsevier, vol. 12(3), pages 383-398, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bayangos, Veronica & Jansen, Karel, 2011. "Remittances and Competitiveness: The Case of the Philippines," World Development, Elsevier, vol. 39(10), pages 1834-1846.
    2. Bayangos, V.B. & Jansen, K., 2010. "Remittances and competitiveness," ISS Working Papers - General Series 18701, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    3. Veronica Bayangos & Karel Jansen, 2010. "The Macroeconomics of Remittances in The Philippines," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 28(61), pages 18-58, August.
    4. Alper Karasoy, 2021. "How do remittances to the Philippines affect its environmental sustainability? Evidence based on the augmented ARDL approach," Natural Resources Forum, Blackwell Publishing, vol. 45(2), pages 120-137, May.
    5. Tchantchane, A. & Rodrigues, G. & Fortes, P.C., 2013. "An Empirical Study on the importance of Remittance and Educational Expenditure on Growth: Case of the Philippines," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 173-186.
    6. Sarah Lynne Salvador Daway‐Ducanes, 2019. "Remittances, Dutch Disease, and Manufacturing Growth in Developing Economies," Scottish Journal of Political Economy, Scottish Economic Society, vol. 66(3), pages 360-383, July.
    7. Khodeir, Aliaa, 2015. "Migration Remittances Inflows and Macroeconomic Shocks: The Case of Egypt," MPRA Paper 103506, University Library of Munich, Germany, revised 2015.
    8. Haryo Kuncoro, 2020. "The role of exchange rate in remittance inflows: Evidence from Indonesia," Economics Bulletin, AccessEcon, vol. 40(2), pages 1508-1521.
    9. Aliaa Nabil Khodeir, 2015. "Migration Remittances Inflows and Macroeconomic Shocks: The Case of Egypt," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 1001-1010.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bayangos, Veronica & Jansen, Karel, 2011. "Remittances and Competitiveness: The Case of the Philippines," World Development, Elsevier, vol. 39(10), pages 1834-1846.
    2. Michael, Owiso, 2008. "Literature Review: Migration, Remittances and Development," MPRA Paper 104988, University Library of Munich, Germany, revised 2008.
    3. David, Blight, 2017. "Literature Review on International Migration: Development Perspectives," MPRA Paper 106312, University Library of Munich, Germany, revised 2017.
    4. Christidis, Les, 2008. "Literature Review on Migration and Remittances Development," MPRA Paper 105237, University Library of Munich, Germany, revised 2008.
    5. Flippo, Behnaz, 2009. "A Literature Review: Migration and Remittances," MPRA Paper 104877, University Library of Munich, Germany, revised 2009.
    6. Antonella, Barbarito, 2013. "Migration, Remittances and Development: A Literature Review," MPRA Paper 104715, University Library of Munich, Germany, revised 2013.
    7. Chrząstowska, Bożena, 2010. "Migration and Remittances: A Literature Review on Remittance Behaviour," MPRA Paper 104690, University Library of Munich, Germany, revised 2010.
    8. Vitalievna Lebedeva, Elena, 2012. "Migration and Development: A Comprehensive Literature Review," MPRA Paper 104373, University Library of Munich, Germany, revised 2012.
    9. Binhan Elif, Yilmaz, 2010. "Stability, Cyclicality and Sustainability of Migration: A Literature Review," MPRA Paper 104258, University Library of Munich, Germany, revised 2010.
    10. Jounghyeon Kim, 2019. "The Impact of Remittances on Exchange Rate and Money Supply: Does “Openness” Matter in Developing Countries?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(15), pages 3682-3707, December.
    11. Giulia Bettin & Andrea F. Presbitero & Nikola L. Spatafora, 2017. "Remittances and Vulnerability in Developing Countries," The World Bank Economic Review, World Bank, vol. 31(1), pages 1-23.
    12. Junaid Ahmed & Inmaculada Martinez-Zarzoso, 2016. "Blessing or Curse," Journal of South Asian Development, , vol. 11(1), pages 38-66, April.
    13. Zakiyyah, Varachia, 2018. "Literature Review of Migration and Development," MPRA Paper 106444, University Library of Munich, Germany, revised 2018.
    14. Bettin, Giulia & Paçacı Elitok, Seçil & Straubhaar, Thomas, 2012. "Causes and consequences of the downturn in financial remittances to Turkey: A descriptive approach," Edition HWWI: Chapters, in: Paçacı Elitok, Seçil & Straubhaar, Thomas (ed.), Turkey, migration and the EU, volume 5, pages 133-166, Hamburg Institute of International Economics (HWWI).
    15. MITSUI, Izumi, 2019. "A Literature Review of Economic Diaspora," MPRA Paper 109115, University Library of Munich, Germany, revised 2019.
    16. Jeffrey Frankel, 2011. "Are Bilateral Remittances Countercyclical?," Open Economies Review, Springer, vol. 22(1), pages 1-16, February.
    17. Gazi Mainul Hassan & Mohammed S. Bhuyan, 2013. "Growth Effects of Remittances:Is there a U-Shaped Relationship?," Working Papers in Economics 13/16, University of Waikato.
    18. Bayangos, V.B. & Jansen, K., 2010. "Remittances and competitiveness," ISS Working Papers - General Series 18701, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    19. Carmen, Maria del, 2018. "Economic Migration and Diaspora: A Literature Review," MPRA Paper 109498, University Library of Munich, Germany, revised 2018.
    20. Akasaka, Shintaro, 2016. "Theoretical Review of Migration and Development," MPRA Paper 106364, University Library of Munich, Germany, revised 2016.

    More about this item

    Keywords

    remittances; monetary policy; exchangerate; capital flows; dynamic structural model.;
    All these keywords.

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:col:000107:008319. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Espe (email available below). General contact details of provider: https://edirc.repec.org/data/brcgvco.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.